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Using any relevant information below, calculate GDP using the expenditure approach.

- Inventory investment: [tex]$50 billion
- Fixed investment: $[/tex]120 billion
- Consumer durables: [tex]$420 billion
- Consumer nondurables: $[/tex]275 billion
- Interest: [tex]$140 billion
- Indirect business taxes: $[/tex]45 billion
- Government wages and salaries: [tex]$300 billion
- Government purchases of goods and services: $[/tex]110 billion
- Imports: [tex]$80 billion
- Exports: $[/tex]40 billion
- Profits: [tex]$320 billion
- Services: $[/tex]600 billion

Sagot :

GinnyAnswer

Final answer:

Calculating GDP using the expenditure approach with provided data.


Explanation:

The GDP (Gross Domestic Product) using the expenditure approach can be calculated by adding up Consumption (C), Investment (I), Government Spending (G), and Net Exports (Exports - Imports). In this case:

  1. Consumption: [tex]$420 billion + $[/tex]275 billion = [tex]$695 billion
  2. Investment: $[/tex]50 billion + [tex]$120 billion = $[/tex]170 billion
  3. Government Spending: [tex]$45 billion + $[/tex]300 billion = [tex]$345 billion
  4. Net Exports: $[/tex]80 billion - [tex]$110 billion = -$[/tex]30 billion (Exports - Imports)

Therefore, GDP = [tex]$695 billion (Consumption) + $[/tex]170 billion (Investment) + [tex]$345 billion (Government Spending) - $[/tex]30 billion (Net Exports) = $1,180 billion.


Learn more about GDP calculation here:

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